A battle is brewing in New York City over smartphone applications that allow users to hail a taxicab. A lawsuit was recently filed by Livery cab drivers to block Yellow Cabs from accepting passengers who use a smartphone hailing application.

The reason the lawsuit has sprung up stems from nuances in the New York taxicab rules. In New York City, Yellow Cabs can pick up passengers who hail them on the street, but can't be dispatched by phone. On the other hand, Livery cabs are in a different category and are only allowed to pick up passengers who call ahead to arrange a pickup. Apparently, Livery cab drivers are upset at the idea that Yellow Cabs being hailed by smartphone are actually being dispatched by phone.

Livery cab drivers believe that if the approximately 13,237 Yellow Cabs with the New York City are allowed to prearrange pickups using smartphone apps such as HailO and Flywheel, it would violate Taxi and Limousine Commission regulations.

HailO for iOS

New York City officials said they are reviewing the apps and hope to have the new system up and running soon.

Yellow Cabs are a $2.5 billion industry and transport over 500,000 passengers each day. However, typical Yellow Cabs within New York spend 40% of their time empty and looking for passengers. Yellow Cab drivers, however, believer that hailing apps will allow them to spend less time empty and more time making money.

It would be better off if the taxi stayed at certain street corners and people went to them. An app like this could allow people to find the pickup locations vs the taxi finding the people.

In Turkey there was a call box to call a taxi. I don't think the app or even a call box would be considered a prearranged pickup. When it comes down to it, the Taxi services need to provide better service to the customer while reducing the cost of driving around empty.

There's no room for taxis to congregate at street corners, at least not any street corner where someone wants to pick up a taxi. It would be a nightmare.

There is a powerful and entrenched taxi lobby in NYC that has been strangling attempts to change the system for years now. What I think the city really needs to do is just issue massive amounts of new taxi medallions or permit non medallioned cabs to pick up passengers, thus debasing the value of the ones currently out there. That would break the back of the taxi lobby almost instantly. This is in part what Bloomberg tried to do with the green cabs, but lawsuits have prevented this so far.